ACCT 101 GROUP PROJECT INSTRUCTIONS

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Melvin Wells
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1 ACCT 101 GROUP PROJECT INSTRUCTIONS This project is to be completed as a group. All group members should actively participate in the project and it is up to the group to decide who will be responsible for what parts of the project. The work can be divided in whatever way your group decides. However, it is not acceptable for one person to do all of the work. All members of the group will receive the same grade. Individual projects will not be accepted, even for partial credit. It is also recommended that the data be copied to more than one group member s USB in the event of unforeseen circumstances. Step 1 Download the Data Download the Excel spreadsheet from my website. You will need a USB/flash drive on which to save your data. You will need to print the transactions/instructions and save the Excel file, which contains all the forms needed (except the journal) to complete the project. Print the instructions and transactions and SAVE the Excel file to your USB. You will complete the project using the Excel file so you will need to save your data on your USB. The forms you need have been set up in Excel and are labeled along the bottom left of the screen in the sheet tabs. You will need to customize your worksheet by giving your group a unique name and entering the group name in cell to the right of the Name cell on each sheet. Follow the directions carefully to complete the project. Step 2 - Journalize the transactions Record the transactions for Sharpe Inc. in the general journal. There is no journal form provided, you will need to use your own journal forms or print some from my website. You must use a journal form to record the transactions and your journal entries must be hand written. Do not record the adjusting entries just yet, only the transactions through December 31, Use only the accounts provided. Please refer to the chart of accounts in the Excel file you saved from my website for a list of accounts. Use only the accounts provided. Step 3 - Post the transactions to the T-accounts Post your journal entries to the T-Accounts in the Excel worksheet you saved from my website. The amounts already in the T-Accounts are the beginning balances and should be included in your balances. You do not need to use a posting reference. Do not add any new accounts, all the accounts you need have already been set up. The account balance will update with each posting. Do not do the adjustments yet! When posting the transactions to the T-accounts, start in the top cell of each T-account for both debits and credits and do not skip any lines. Step 4 - Prepare a Trial Balance Click on the Trial Balance tab and prepare the Trial Balance. The total of the Trial Balance should be $4,450,816. If your balance does not agree, make any necessary corrections before you proceed.

2 Step 5 - Prepare Adjusting Entries Record the adjusting entries in the journal after the journal entries you recorded in step #2. Skip a line after the last entry and write Adjusting Entries in the middle of the account column then journalize the adjusting entries. You do not need an explanation, but skip a line between entries. All the adjusting entries should be dated December 31. Post the adjusting entries to the T-Accounts in Excel. Step 6 - Prepare an Adjusted Trial Balance Click on the Adjusted Trial Balance tab and prepare the Adjusted Trial Balance. The total of the Adjusted Trial Balance should be $4,489,500. If your balance does not agree, make any necessary corrections before you proceed. Step 7 - Prepare the Income Statement Click on the Income Statement tab in the Excel file to prepare the Income Statement using the amounts from the Adjusted Trial Balance. The Income Statement has been formatted using the outlined cells. Entries should only be made in the outlined cells. The exact number of rows needed are outlined so you should not add any rows or columns to the Income Statement. The Net Income should be $681,957. Step 8 Prepare a Retained Earnings Statement and Balance Sheet Prepare the Retained Earnings Statement and the Balance Sheet the same way you did the Income Statement using the amounts from the Adjusted Trial Balance. Both statements have been formatted with the exact number of rows needed. Entries should only be made in the outlined cells; do not add any rows or columns. The Total Assets should be $3,158,382. When printing your reports, please format each sheet to print on one page. Each of the following reports (except the Journal) should each be only ONE page. Turn in the following items (stapled in the order listed below): Cover Sheet (include each group member s name) Journal Entries T-Accounts Trial Balance Adjusted Trial Balance Income Statement Retained Earnings Statement Balance Sheet The project is due during the scheduled Final Exam on Thursday, May 18, 2017, and will not be accepted late or via .

3 ACCT 101 Fundamentals of Accounting I COMPUTER/GROUP PROJECT Dinah Soars, Biff Wellington and Duane Pipe are the stockholders of Sharpe Incorporated. The charter of the corporation authorized 500,000 shares of $5 par common stock, and 100,000 shares of $30 par, 3%, preferred stock. As of January 1, 2018, there were 25,000 shares of common stock issued and outstanding and 4,000 shares of preferred stock issued and outstanding. Selected transactions completed by Sharpe Incorporated during the fiscal yearending December 31, 2018, are as follows: Jan 1 Issued 13,000 shares of $5 par common stock at $19, receiving cash. Jan 1 Issued 6,700 shares of $30 par, 3%, preferred stock at $69 for cash. Feb 1 Purchased equipment for $220,000, paying $20,000 cash and financing the remainder with a 180-day, 5% note payable. Mar 15 Purchased land for $352,000 by issuing 18,000 shares of common stock. Mar 31 Purchased a two-year insurance policy for $39,000. May 1 Purchased 1,600 shares of the company s own common stock at $23 per May 31 Issued $1,000,000 of 8-year, 7% bonds with interest payable semiannually. The amount of cash received was $1,087,936. July 30 Paid the amount due on the note payable signed on February 1. Aug 1 Sold 500 shares of treasury common stock purchased on May 1 for $26 per Sept 15 Declared a 2% stock dividend on common stock to be distributed on September 30 to stockholders of record on September 20. The market price per share on September 15 is $26 per Sept 30 Distributed the stock dividend declared September 15. Oct 1 Borrowed $36,000 from Second Bank by issuing an 7% note. The note is to be repaid in quarterly payments of principal plus interest totaling $2,130 per quarter. Oct 16 Sold 370 shares of treasury common stock purchased on May 1 for $20 per

4 Nov 30 Paid the semiannual interest and amortized the premium on the bonds issued on May 31. Dec 1 Declared a cash dividend at the stated amount to preferred stockholders and.50 per share to common stockholders payable on December 30 to stockholder s of record on December 16. (Hint: don t forget the shares distributed from the stock dividend) Dec 30 Paid the cash dividends declared on December 1. Dec 31 Paid the first quarterly installment of the note issued on October 1. Dec 31 Record revenue for the year of $1,975,000, received $500,000 in cash, the remainder is on account. Dec 31 Record expenses for the year, paid in cash (one compound entry): Rent $170,000 Utilities 13,200 Salaries 760,000 Advertising 140,000 Medical insurance 32,000 Commissions 63,000 Legal and accounting 18,000 Miscellaneous 8,400 Adjusting Entries (1) The employees accrued vacation pay at the end of the year was $12,482. (2) Record depreciation on the equipment purchased on February 1, using the straight-line method. The equipment has an estimated 9-year useful life and an estimated residual value of $11,020. (3) Record insurance expired on the policy purchased March 31. (4) Record the adjusting entry for the interest accrued and the amortization of the premium on the bonds payable since the last interest payment. (round the amount to the nearest dollar)

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